Latin America and Caribbean Exports Grow by 4.1% in 2024, Driven by Higher Volumes Amid Price Stagnation

While the region’s exports have moved out of the contraction phase seen in 2023, the report warns of modest growth ahead due to prevailing global economic uncertainties.

Exports from Latin America and the Caribbean grew by an estimated 4.1% in 2024, marking a recovery from a 1.6% decline in 2023, according to the latest Trade Trends Estimates for Latin America and the Caribbean report published by the Inter-American Development Bank (IDB). This growth was primarily attributed to an increase in shipment volumes, as export prices remained stagnant or declined for most commodities. Key Findings from the Report:

While the region’s exports have moved out of the contraction phase seen in 2023, the report warns of modest growth ahead due to prevailing global economic uncertainties.

“Risks to regional trade remain balanced, but projections point to only limited growth. To sustain trade as a driver of economic growth, it’s crucial for the region to focus on reforms and investments that enhance productivity, facilitate trade, and attract investment,” said Paolo Giordano, Principal Economist at the IDB’s Productivity, Trade, and Innovation Sector.

Subregional Performance Highlights

1. South America:

   • Export growth reached an estimated 4.0% in 2024, rebounding from a 4.4% decline in 2023.
   • The surge was driven by a remarkable 6.9% increase in shipment volumes, despite ongoing price declines for key commodities.

2. Mesoamerica:

   • Export growth stood at 3.5%, primarily driven by Mexico, which posted a 4.0% increase in exports.
   • Central America’s exports stagnated, with just 0.1% growth, highlighting a need for targeted interventions.

3. Caribbean:

   • The Caribbean witnessed a robust recovery, with exports growing by 18.3% after a sharp 14.9% decline in 2023.
   • This growth was largely attributed to higher tourism-related exports and increased demand for niche products in global markets.

4. Imports:

   • Regional imports rebounded with a 3.2% growth in 2024, recovering from a steep 6.8% decline in 2023.

Commodity Prices and Sectoral Insights

The report highlighted significant price volatility across the region’s key export commodities:

• Positive Performers: Coffee prices surged by an impressive 57.7% year-on-year, and copper saw a 9.4% price increase.
• Decliners: Soybean prices dropped by 22.1%, sugar by 13.7%, iron by 9.2%, and oil by 2.7%.

This downward trend in prices is expected to persist, given the ongoing volatility in global markets. However, industries such as coffee and copper production present opportunities for further investment and growth.

Regional Outlook and Recommendations

The IDB underscores the need for Latin America and the Caribbean to implement strategies that boost trade resilience and long-term growth. Recommendations include:

• Trade Reforms: Streamlining trade policies to facilitate cross-border transactions.
• Productivity Investments: Enhancing infrastructure, technology, and skills in export-oriented sectors.
• Diversification: Reducing overreliance on a narrow set of commodities by exploring emerging industries such as renewable energy, agritech, and digital services.

The recovery in exports signals resilience in the region’s trade landscape, but challenges remain. The region must adapt to global economic uncertainties and commodity price fluctuations while fostering innovation and diversification. The IDB emphasizes that sustained reforms and investments are essential to transform short-term recovery into long-term growth for Latin America and the Caribbean.